For those who wish to contribute assets to the college while retaining the income those assets generate, Lawrence offers a variety of life-income gift options. In exchange for an irrevocable transfer of funds or property to the college, a donor may retain an attractive income for his or her lifetime -- and for that of a loved one if desired. Such gifts may take the form of gift annuities, charitable trusts, or pooled income fund contributions. All these arrangements generate significant income- and estate-tax savings, and the income paid to the donor can often exceed the current rate of return available from the contributed assets. In addition, capital gains taxes on the appreciated portion of stocks or other property can be reduced, avoided, or postponed by such strategies.
Charitable Gift Annuities
Gift annuities offer a straightforward way for donors to make an irrevocable gift to Lawrence in exchange for fixed payments for life. The payout rate is determined by the age(s) of the individual(s) receiving the payments. An immediate income tax deduction is allowed to the donor for a large portion of the gift amount, and the assets are removed from the donor's estate. Many donors also take advantage of favorable capital gains treatment by using highly appreciated stocks and other capital assets to establish an annuity.
As an example of how this gift arrangement works, a charitable gift annuity funded with $10,000 under the current rates and established for two beneficiaries aged 75 and 75 would pay $730 each year to the beneficiaries for their joint lifetimes and then to the survivor for his or her lifetime. Additionally, these donors would be eligible for a charitable tax deduction of over $3,600. After the beneficiaries are both gone, the remaining principal is made available to Lawrence University.
Deferred Payment Gift Annuities
Retirement planning and tax-sheltered savings for college costs can be facilitated through a deferred payment gift annuity. In this form of annuity, a donor makes an irrevocable transfer of assets to Lawrence now in exchange for fixed payments to begin at a specified date in the future. The longer the deferral of the income, the higher the payout rate. This strategy carries with it the tax advantages of the standard annuity, though typically with much higher income tax deductions, and is often used by people in high-earnings years to reduce income taxes immediately while building a solid foundation for retirement needs. A variation of the deferred payment gift annuity calls for a flexible payment starting date, with correspondingly higher payments for longer deferral periods.
The Lawrence University Pooled Income Fund
This gift option involves an irrevocable transfer of money or securities to a pooled investment fund managed by the college.
For more information about life-income plans, contact the Office of Development at 800-283-8320, Ext. 6517. Development Staff
